Articles Posted inwhistleblower awards

Former whistleblower, Everett Stern, states that the crackdown on financial fraud still has a way to go before it can truly be considered a successful pursuit.

A whistleblower is considered anyone who has insider information about a fraudulent act and decides to come forward to law enforcement about such activities. Anyone can be a whistleblower, and if they decide to pursue the matter legally, they will be acting in the name of the government. The government can then choose to step in and settle the matter if they find it to be a worthy endeavor that can benefit from their direct support.

Stern was a whistleblower involved in the case of HSBC, a British bank that was accused of money laundering activities. Stern assisted in this case by providing essential insider information about the bank’s financial details to law enforcement authorities. This case eventually ended in a $1.9 billion fine in repercussions from HSBC.

According to an investigative report in the Wall Street Journal, the heavy tariffs imposed on Chinese goods has resulted in a large increase in tariff evasion schemes by Chinese companies seeking to sell their goods here. Customs officials, importers and shipping brokers say that the tariff increases are being countered by unscrupulous Chinese manufacturers who are fraudulently shipping products here under false manufacturers codes and through trans-shipping and falsifying the actual country of origin, according to the Wall Street Journal. The result is that the tariffs are failing to protect. The tariff evasion using fraudulent product codes relates to 10-digit designation called an HTS code, of which there are 18,927. These codes are required to identify products and varieties. Unscrupulous manufacturers seeking to evade our tariffs send the products in with codes which designate products which are not on the tariff list.https://www.wsj.com/articles/the-u-s-china-trade-battle-spawns-a-new-era-of-tariff-dodges-1539009200?mod=hp_lead_pos5

One indicator of the misclassification increase is that there were 146 rulings in July, nearly triple the number six months earlier and this is considered the tip of the iceberg. In one example included in the WSJ article, a wood importer in Oregon received a call from a supplier asking if he would like some Chinese plywood tariff free. The importer asked how this would happen and the response was don’t worry about it as the plywood would not contain any Chinese markings and it would be shipped under some other code.

Diamond saw blades made in China now carry 82% tariffs. In July, two California importers controlled by a Chinese manufacturer tried to dodge the tariff by coding diamond saw blades as grindstonesaccording to Customs. The maker, Danyang Like Tools Manufacturing Co., claimed independent of the California importers but one of them told the agency Danyang was its owner. The California firms have disputed the charges.

Office Depot will pay $68.5 million for allegedly overcharging various cities and towns for office supplies

More than 1,000 cities, counties, school districts and other government entities in California – including Los Angeles and Santa Clara County – will share in a $68.5 million settlement paid by Office Depot for allegedly overcharging them for office supplies. The lawsuit alleged that Office Depot failed to give most of its California government customers the lowest price it was offering any government customer as required under its contracts. Other pricing misconduct also was alleged.

Participants in the contract are guaranteed to receive Office Depot’s best available prices for government purchasers, according to Sherwin’s complaint. But Office Depot allegedly gave Los Angeles, Santa Clara and the other California entities that are part of the settlement a lower discount rate than other government entities were given.

Edward O’Donnell, a former Exec. for Countrywide financial is about to collect $57.6 million from Bank of America, for his role in exposing fraudulent activity at the firm. O’Donnell filed false-claims lawsuit that accused Countrywide Financial, which is now owned by Bank of America, of defrauding government-backed mortgage finance companies Fannie Mae and Freddie Mac by selling them defective mortgages.

It was the fifth consecutive year the Justice Department recovered more than $2 billion from cases alleging fraud against Medicare,Medicaid and Tricare. 9. Whistle-blowers, are allowed to file lawsuits on behalf of the government. The government can later decide whether to intervene. In successful lawsuits, whistle-blowers are entitled to a percentage of the money recovered, leading to large rewards in some cases. In fiscal 2014, more than 700 whistle-blowers filed cases in healthcare and other areas, and reaped $435 million.

Much of the moneys recovered this year was from the pharmaceutical industry.Johnson & Johnson agreed to pay $1.1 billion in November 2013 to settle allegations that Johnson & Johnson promoted the drugs Risperdal, Invega and Natrecor for uses not approved by the FDA, causing providers to submit hundreds of millions of dollars in false claims to federal healthcare programs.

The Justice Department collected $24.7 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2014. The more than $24 billion in collections in FY 2014 represents nearly eight and a half times the appropriated $2.91 billion budget for the 94 U.S. Attorneys’ offices and the main litigating divisions of the Justice Department combined in that same period.

The amount is more than three times the $8 billion collected in FY 2013. The largest civil collections were from affirmative civil enforcement cases, many of which were brought under the whistleblower provisions of the False Claims Act, in which the United States recovered government money lost to fraud or other misconduct or collected from individuals and/or corporations for violations of federal health, safety, civil rights, tax, or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.

The total includes all monies collected as a result of Justice Department-led enforcement actions and negotiated civil settlements. It includes approximately $13.7 billion in payments made directly to the Justice Department, and $11 billion in indirect payments made to other federal agencies, states and other designated recipients.

The largest single source of collections came from civil penalties paid by financial institutions to resolve financial fraud claims stemming from the 2008 financial crisis, including significant amounts paid by JPMorgan and Citigroup Inc, to resolve federal and state civil claims related to the packaging, marketing, sale and issuance of residential mortgage-backed securities (RMBS). Both resolutions include record penalties under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) and in addition, also provide billions of dollars of relief to struggling homeowners.

Department collections also included hundreds of millions in fines from an ongoing investigation into institutions involved in the manipulation of the London Interbank Offered Rate (LIBOR), including UBS Securities Japan Co. Ltd., and RBS Securities Japan Ltd., a wholly owned subsidiary of The Royal Bank of Scotland plc (RBS). Hundreds of millions in additional collections resulted from the department’s ongoing investigation into international price-fixing and bid rigging in the auto parts industry. For instance, Bridgestone Corp., a company based in Tokyo, Japan, agreed to plead guilty and to pay a criminal fine for its role in a conspiracy to fix prices of automotive anti-vibration rubber parts installed in cars sold in the United States and elsewhere.

The department also collected millions in criminal penalties after resolving investigations into violations of the Foreign Corrupt Practices Act (FCPA). For instance, Diebold Inc., an Ohio-based provider of integrated self-service delivery and security systems, pleaded guilty to violating the FCPA by bribing government officials in China and Indonesia and falsifying records in Russia in order to obtain and retain contracts to provide ATMs to state-owned and private banks in those countries.

Davita Healthcare Partners which operates dialysis centers, has agreed to pay $400 million to settle a False Claims Act lawsuit involving kickbacks to doctors. DaVita , one of the nation’s biggest providers of dialysis services ,paid doctors hidden kickbacks as a way to get patient referrals for its dialysis clinics and to reduce or eliminate competition from other dialysis centers the suit alleged. Continue reading

A jury has ruled that Trinity Industries (TRN) deliberately withheld information from the U.S. Government about cost-savings to its highway guardrail system that made that system more dangerous which defrauded the government out of $175 million.The case was brought by Joshua Harman, a maker and installer of guardrail systems in Virginia. Trinity made secret design changes that transformed one of its products into a potentially lethal highway hazard, wrongly passing off the product as eligible for federal funding and defrauding the government of $218 million, Mr. Harman claimed. Continue reading

Pharmaceutical company Shire Pharmaceuticals LLC will pay $56.5 million to resolve civil allegations that it violated the False Claims Act as a result of its marketing and promotion of several drugs, the Justice Department announced today. Shire manufactures and sells pharmaceuticals, including Adderall XR, Vyvanse and Daytrana, which are approved for the treatment of attention deficit hyperactivity disorder (ADHD), and Pentasa and Lialda, which are approved for the treatment of mild to moderate active ulcerative colitis.

The settlement resolves allegations that Shire promoted Adderall XR for certain uses despite a lack of clinical data to support such claims and overstated the efficacy of Adderall XR, particularly relative to other ADHD drugs. Among the allegedly unsupported claims was that Adderall XR was clinically superior to other ADHD drugs because it would “normalize” its recipients, rendering them indistinguishable from their non-ADHD peers.

Individuals who had problems with a DePuy ASR hip replacement resulting in the need for revision surgery must register by January 6 to be part of the settlement program announced in November.

There are about 12,000 hip replacement lawsuits pending in state and federal courts around the country, filed following the recall of the DePuy ASR XL Acetabular Hip System in 2010. The allegations relate to faulty design in that the metal on metal hip implant resulted in the release of metallic debris.

In November, the DePuy ASR settlement program was announced which will result in the manufacturer paying about $2.4 billion.